House OKs temporary highway fund fix

WASHINGTON — With an August deadline looming, the House voted Tuesday to temporarily patch over a multibillion-dollar pothole in federal highway and transit programs while ducking the issue of how to put them on a sound financial footing for the long term.

The action cobbles together $10.8 billion by using pension tax changes, customs fees and money from a fund to repair leaking underground fuel storage tanks to keep the federal Highway Trust Fund, which pays for transportation programs nationwide, solvent through May 2015. The vote was 367 to 55. A similar bill is pending in the Senate.

Additional Images

A sign warns that a damaged road is closed. The Highway Trust Fund has been on the edge of bankruptcy since 2008. The Associated Press

THE MAINE DELEGATION

Reps. Mike Michaud and Chellie Pingree, both Democrats, voted to support the legislation Tuesday.

“The steps we took are securing construction jobs in Maine and will … bolster economic development,” Michaud said. “But we cannot afford to keep kicking the can down the road.”

Pingree noted that without Congressional action, the Department of Transportation would have implemented a 30 percent reduction in aid provided to states for construction, repaving and transportation.

Gov. Paul LePage had threatened to use state saving and bond money to complete much needed highway and bridge repair projects if the federal funding stalemate had continued. That action would have cost between $27 and $29 million, according to the governor.

Without congressional action, the Transportation Department says that by the first week in August the fund will no longer have enough money to cover promised aid to states, and the government will begin to stretch out payments. Congress has kept the highway trust fund teetering on the edge of bankruptcy since 2008 through a series of temporary fixes because lawmakers have been unable to find a politically acceptable long-term funding plan.

The most obvious solution would be to raise the federal 18. 4 cents-a-gallon gasoline and 24.4 cents-a-gallon diesel tax, which haven’t been increased in over 20 years. But lawmakers are reluctant to raise taxes in an election year – especially Republicans for whom a vote in favor of any tax increase could trigger a backlash from their party’s base.

As a result, Congress has had to look elsewhere for transportation money while not increasing the federal deficit. The bill by Ways and Means Committee Chairman Dave Camp, R-Mich., relies on tax changes that are forecast to generate revenue over 10 years, but provide only enough money to keep the highway and transit programs going for another 10 months.

The largest chunk of the money, $6.4 billion, results from allowing employers to defer payments to employee pension plans. Funding pension plans normally results in a tax savings for companies, and deferring those payments means they will pay more in taxes and increase federal revenue.

Portland Press Herald e-edition

Here at MaineToday Media we value our readers and are committed to growing our community by encouraging you to add to the discussion.

To ensure conscientious dialogue we have implemented a strict no-bullying policy. To participate, you must follow our Terms of Use. Click here to flag and report a comment that violates our terms of use.